How does debt collection work in Germany?

In the debt collection procedure in Germany, the first extra-judicial attempt to recover debts is the amicable procedure, in which the creditor notifies the debtor about the unpaid debts, the deadline to fulfill the payment and the consequences for not obeying to the claim in the specified time and situation.

What are the steps for debt collection?

How the debt collection process works

1. You receive a notice from your creditor that your account is past due.
2. Your creditor moves your account to a “charge off” status.
3. Your debt is sent to a collector.
4. The collector contacts you to verify your identity.
5. You receive a written debt validation notice from the collector.

How long can you be chased for debt in Germany?

The general limitation period is 10 years. For many contracts, however, a limitation period of 3 years applies.

How does the collections process work?

If a company works for the original creditor, the creditor pays the debt collector a percentage of the debt collected. Sometimes, debt collection agencies will buy out the original debt for pennies on the dollar after you fail to pay back the debt to the original creditor — and then go after you.

What happens if you don’t pay your bills in Germany?

If you still do not pay, you will usually receive a warning letter or “Mahnung- which costs money. That means now you not only have to pay the bill, but also the Warning letter fees (“Mahngebühren”). If you do not respond to any of these reminders and warning, many companies commission a debt collection agency.

What is a debt collection letter?

A debt collection letter reminds a debtor that they owe you money. You can use a debt collection letter to set up a repayment plan or warn of impending legal proceedings. A debt collection letter should include the total debt owed, the initial due date, and any necessary warnings of impending legal action.

What information is needed for collections?

Every collection agency requires the basics: the debtor’s name, address, and balance owed. In addition, a Social Security number will aid the collection agency in tracking down difficult-to-locate debtors — ones who are trying especially hard to dodge their bills.

What happens if you don’t pay your debt in Germany?

Can debt collection agencies take you to court?

Debt collection agencies may take you to court on behalf of a creditor if they have been unable to contact you in their attempts to recover a debt. Before being threatened by court action, the debt collection agency must have first sent you a warning letter.

Is debt collection illegal?

The FTC enforces the Fair Debt Collection Practices Act (FDCPA), which makes it illegal for debt collectors to use abusive, unfair, or deceptive practices when they collect debts. Here are some answers to frequently asked questions to help you know your rights.

What happens if you leave the country with debt?

What happens to your debt when you leave the country? Technically, nothing happens to your debt when you leave the country. It’s still your debt, and your creditors and collectors will continue trying to get you to pay it back. Eventually, your creditors may file a lawsuit in an attempt to collect your unpaid debts.